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"Myer has had nothing but praise for Ms Ellery's design and product, notwithstanding these proceedings Myer would be content for her to still sell to Myer, but not sell to Myer and David Jones at the same time," he said.

As part of her contract with Myer, Ms Ellery was to be a judge at Myer fashions on the field during the spring racing carnival last year and her dresses were to be worn by celebrities Ms Judd and Ms Bingle.

But the court heard Myer became aware just weeks before the carnival that Ms Ellery had appeared at a David Jones event.

She signed with David Jones on the day between the Melbourne Cup and Oaks Day, Mr Murdoch said.

But Ms Ellery's barrister David Shavin, QC, said it was Myer that had caused his client damage by not increasing its orders for her clothing and by pulling her out of the spring racing carnival.

He said the Myer's orders were insufficient for the label to survive.

Mr Shavin said a new label L'America launched by Ms Ellery for David Jones was not a diffusion of the Ellery Land line, but a completely separate label.

He said the label was t-shirts, casual wear and jeans for teenagers, not high-end fashion.